When a loved one gets older, their physical health isn’t the only thing that’s at risk of deterioration. If their mental health declines too, they may struggle to manage their money on a daily basis and could even be vulnerable to identity theft or other scams. Keep these steps in mind that you can start taking now to protect your elderly loved one from financial missteps.

protect your elderly loved one

Start a Conversation

Some people may resist the idea that their mental health or capacity is declining as they age. Rather than forcing the issue, it’s best to sit down with your loved one and talk things through. Make sure that these conversations are happening before, rather than after something happens.

And, get a list of contact information for their bank and other financial contacts like an investment advisor, so that you know who you should call should a situation arise. Help them understand the context of what you’re trying to do; you want to protect them from potential harm.

Determine the Best Route to Take

Depending on what your loved one agrees to, certain financial decisions may mean that it’s necessary for you to make things official.

Power of attorney

This is a legal document that provides you with legal authority to make decisions regarding your loved one’s property and money. Your loved one will be able to revoke the authority from you at any time and are still able to make decisions for themselves.

Guardianship of property

If the court has decided that your loved one is unable to manage their property or finances on their own, you may be directly appointed as a guardian of property. You may also be appointed as a guardian of the person, allowing you to make health and other personal decisions on behalf of your loved one. With guardianship litigation, you have a responsibility both to your loved one and to the court.

Understanding Responsibility

By taking one of the possible routes to legally assume control of your loved one’s finances and/or property, you will become a fiduciary, meaning that you’re legally bound to act in their best interests. After all, their money is still theirs, whether they are able to manage it or not. You should keep yours and your loved one’s assets separate and involve them in as many decisions as possible.

Helping Them Avoid Scams

Most scams that prey on the elderly are played off emotions, so even those who aren’t struggling mentally could become a target. For example, a scammer may call pretending to be a relative who needs money or posing as law enforcement needing money for an investigation. To help your loved one avoid being a victim to scams, try and help without threatening their authority. For example, ask them to speak to you first before they make any big money decisions.

Finally, it’s important to be respectful of your elderly loved one and understand whose money you are managing. Bear in mind that it’s still down to them to determine what their own best interests are.